There is renewed hope in the UK that the rollout of a vaccination will bring about an end to the covid-19 lockdowns and that life will begin to return to something approaching normal. But what will this mean for the world of charity retail, particularly when building a strategy to move the operation forwards into 2021 and beyond. This has been the number one question that charity CEO’s have been asking Skyline during the hundreds of Zoom conversations we have had with them in the last 12 months.
The consistent opinion among the UK’s leading retail experts is that ‘retail will never be the same again’ and that ‘online trading has grown considerably due to the forced change in consumer shopping habits, accelerated by lockdowns’.
Retail expert and former Dragons’ Den star Theo Paphitis (interview with Emma Simpson BBC 22nd May 2020) stated ‘The shift to online buying has been accelerated by five years”.
The UK’s leading charity retail expert and Skyline Managing Director Barry Moles (in presentations to 100+ CEO’s between April 2020 and December 2020) stated “Retail has moved on approximately five years during 2020 driven by the growth of online buying”.
“The shift to buying online has been accelerated by five years”
Theo Paphitis, Retail Expert and Dragons’ Den Star
The data supports these views with online retail growing from 19% in December 2019 to 26% in October 2020; a growth of 36% in just 10 months.
This means bricks and mortar retail has declined from 81% to 74% in just 10 months. It would seem the obvious reaction then to shift all focus towards online trade and making this the priority of any retail strategy. However, this would be unwise as ecommerce still only accounts for a quarter of all retail sales. Bricks and mortar shops, particularly in a sector much loved and supported by communities, is still a massive part of retail now and in the foreseeable future.
So, what should a good charity retail strategy look like in 2021?
The good news is that there is a proven approach which most successful charity retailers follow.
1. Ensure you have a complete understanding of your retail business.
Before any strategy is written it is recommended you undertake a thorough review of your retail business. This will tell you how your existing operation is most likely to perform in a post lockdown world and an action plan on how to maximise its potential. This needs to include the following elements:
- A highly detailed diagnostics report that leaves no stone unturned; it should categorise by departments, performance per shop, donations (both quantity and quality), donations per location and also the 3 core elements of charity retail e-commerce: supply chain, selling platforms and distribution.
- >Detailed projection of what impact would occur if all possible best practices were fully installed across the retail estate including e-commerce.
2. Write a 3-year retail strategy
We frequently see a temptation from charities to write a longer strategy but within a fast-changing environment like retail it is often our recommendation to start with 3 years and conduct annual reviews that include these key elements.
- Detailed financial projections by revenue stream (shop locations / e-commerce). Note: This information can be generated after the detailed analysis.
- A strategy for each revenue stream (shop locations / e-commerce) that includes:
- a. Leases (renew – run through – renegotiate – renew)
- b. Improvement plan per revenue stream
Note: This information can be generated after you have conducted your detailed projections of the impact of best practices being fully installed across the retail estate, including e-commerce
- An affordable retail structure that is fit for the future.
Irrespective of how effective a retail structure was prior to Covid-19, it is advisable to now ensure it is future-proof and fit for purpose, not to mention affordable.
It is no secret that retail has evolved and is, in reality, very different now to what it was this time last year. Most charity retailers are starting to recognise the need for a robust and proven approach to help them develop an appropriate retail strategy for 2021 and hopefully this blog and the work we do within the world of Charity Retail will help the ones who are not quite there yet